Verizon CEO Hans Vestberg is excited about the opportunities for 5G in the company, even when some companies need to cut costs due to COVID-19.
Verizon’s 5G network is now in parts of 35 cities, while its 5G Home wireless product is currently in six markets. The plan is to be in more than 60 cities with its Ultra Wideband 5G mobile service by the end of 2020, and it expects to be in 10 markets with its 5G fixed wireless access (FWA) service this year.
Of course, analysts are interested in Verizon’s plans for 5G coverage nationwide, and its use of millimeter wave (mmWave) technology remains a curse to some. It means Verizon’s 5G coverage is negligible compared to AT&T, which yesterday announced 5G service nationwide, and T-Mobile, which came nationwide last year with 600 MHz and is adding 2.5 GHz.
Verizon is on track to deploy more than five times as many mmWave base stations this year compared to last year, “so the footprint will be much broader” and will be in some 60 cities, Vestberg said. Those cities will be much more covered than last year.
So far this year, it has released few markets out of those 60, so “it should expect a lot of noise from us in the second half, and we are very excited about that.”
His model will include across the country, he added. “Think of our model as a millimeter wave that is transformative, no one is that close in the world, so we will have national coverage on top of that.” Furthermore, “we have the best 4G network in the world. I don’t think our clients are disappointed with us. We build things that are transformative. “
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Verizon is using Dynamic Spectrum Exchange (DSS) technology to offer national 5G service this year. Vestberg said the company is on track for that and, in some cases, ahead of the plan. “Our DSS test is going well,” he said.
Vestberg acknowledged that airlines, restaurants, and some large travel-related companies, especially hit by COVID, are trying to cut their costs as much as possible, but others are speeding up digitization plans.
When it comes to government clients, states and municipalities must adopt new models to provide services to students or the community in general. Several states are using Verizon services for remote learning, and have just announced 5G tests with the Department of Defense, he noted.
On the company side, he estimates he holds five to seven meetings with large companies each week to discuss digital plans, and many of them are speeding up rather than delaying their efforts.
Mobile Edge Compute (MEC) will be at 10 sites this year, and Verizon is working with IBM and SAP, two major application providers. Many of the use cases are about real-time decision making. A large manufacturing facility can use MEC to enable robotics, for example. IoT devices with 5G will allow new ways to offer a service.
For some, it is low latency and security, in the sense that they can keep their data storage closer to the limit and the data is contained within a company. So far, “latency and security, this is how 5G Mobile Edge Compute scenarios work,” he said.
While AT&T CEO John Stankey said Thursday that he does not see 5G as a good replacement for home broadband anytime soon, Vestberg expressed confidence in Verizon’s 5G Home product and the progress they have made towards improve it.
Verizon will have CPE with a much better chipset in the second half, as it said before, and “we feel good.” The ambitions are high: the client must be able to receive the CPE and install it by himself in a short period of time.
“I want it to be under an hour,” and it doesn’t seem like it’s there yet, but it’s come a long way from the eight hours it used to take. Compared to a fiber installation, which still requires an appointment and takes hours, “this is a totally different way,” he said.
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Regarding an Apple iPhone 5G expected in the second half, Vestberg said he couldn’t comment on Apple’s plans, but that it will be a big event when the time comes. The US market has a high penetration in iOS, Apple’s operating system, and customers are reluctant to switch from one operating system to another, iOS versus Android. An Apple 5G phone is “a very important event,” he said.
When asked about T-Mobile’s recent low price moves, Vestberg said, “I feel great with the competition … This is nothing new,” and the team is well prepared. “I am really excited for the second half.”
‘Quarter easier’ for some time: analyst
While the Verizon CEO is optimistic about the second half of the year, investment analysts are not so sure of his longer-term outlook.
“As with AT&T, this is probably the easiest quarter Verizon will face for some time. We expect competition to materially rebound in August from T-Mobile and Cable, ”New Street Research analyst Jonathan Chaplin wrote in a note on Friday.
Analyst Craig Moffett said Verizon’s overall message is similar to that of the last quarter. “In general, Verizon will be fine,” he wrote in an investor note.
“But if that feels more like playing defense than offense, it’s because, well, it is. And in the long run, Verizon’s overreliance on the millimeter wave spectrum leaves them vulnerable,” Moffett said. “Their 5G deployment strategy leaves them well positioned only in dense urban environments and, in fact, only in dense urban environments meeting places. Remain exposed to coverage Everywhere plus. Even if they win big at the end of the year auction for C-Band, they will be at least a few years behind T-Mobile. That will hurt especially in the business market, where they are dominant today. “
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